THE NATION, FEB: 9,1998.Rangoon ins

[suriya@xxxxxxxxxxxx]

Rangoon insists on payment for delays in construction

Agence France-Presse

RANGOON - Thailand must pay thousands  of dollars a day in compensation if the launch of a disputed gas pipeline 1inking Burma and Thailand is delayed by Thai protesters, officials said yesterday.
 
The comments came after demonstrators in western Thailand last week rallied to block construction of a remaining section of the line, due to start pumping in July and bringing in desperately-needed revenue for military-run Burma.

 The compensation is crucial as the cash-strapped Burmese government had pledged much of the expected monthly revenues from the project to debtors and will find its debts ballooning if the project is held up, analysts said.

  "The Thais do have to compensate the consortium building the Burma side of the pipeline as well as the government if it does not go on line as planned in July,' a senior government official said.

 Construction, creeping towards the protesters guarding the forested area, was suspended last month as the government examined conflicting claims of supporters and opponents of the scheme.

 The Thai government has set up committees to establish whether the operator of the 260-kilometre Thai pipeline, the state-owned Petroleum Authority of Thailand (PTT), will be liable for penalty fines or compensation if the project does not launch on schedule.
 
The conservationists and local villagers, who say the pipeline will destroy one of Thailand's last areas of virgin forest, are blocking the bulldozers sent in to finish the project. 

The standoff between the protesters and the authorities has raised the prospect of a clash between the two sides.
 
However, while the scheme is being held up at a crucial time in construction the government, hit by Asia's economic firestorm, can ill afford penalty fines or compensation to the Burmese builders of the troubled pipeline.

 But the official of Burma's military government expressed confidence that work on the disputed scheme will likely continue after talks and mediation efrorts.
 
 "It's a matter for Thailand, but the pipeline will ultimately benefit the Thai economy and develop industry, so it is also in Thailand's interest to see it finished," he said.

 He conceded, however, that the revenue from the pipeline - which will carry gas from fields in Burma's Andaman sea to Thailand - is "Crucial" for cash-strapped
Burma which is battling its own economic crisis.
 
Experts estimated when construction work began in 1996 that the pipeline would bring in up to US$400 million a year for Burma"s generals, potentially making it their largest single source of liquid funds.

 The revenue, according to analysts, could help Burma battle its economic woes, including falling foreign reserves and a massive trade deficit but any delays in the project could deal a harsh blow to the country's finances.

 "They have already pledged a lot of the expected revenues from the pipeline for
import bills and other major expenses, so any delays in receiving payments would
hurt the economy," a Western analyst here said.     
                           
 The Burma side of the pipeline -being developed by France's Total Oil and the US giant Unocal- is nearing completion, officials said, while oil industry sources said it may be ready ahead of schedule.

 "We will fulfil our part of the obligation and it's now up to the other side,' the government official said.
 
 The pipeline scheme, worth $1.03 billion for Burma, has been severely criticised by human rights groups and the democratic opposition here who claim it will  benefit only the ruling junta.

Oopposition leader and Nobel Peace prize laureate Aung San Suu Kyi has called for a trade and investment boycott on Rangoon in a bid to Push the junta into softening its stance to opposition.

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